• A good credit score boosts home loan eligibility and secures better rates.
• It is preferred to have a score of 700+ credit score but you can always improve it. 
• To improve your credit score, pay debts on time and avoid frequent new credit inquiries. If you need any help, HDFC Bank experts are here to guide you through the process.

Understanding the ideal minimum credit score for home loans

When it comes to applying for a home loan, your credit score plays a crucial role in determining its approval and what interest rates you’ll be offered. Often referred to colloquially as a “CIBIL score,” this term is commonly used in India, but in reality, it refers to one of several credit scores from different bureaus. Of course, one of the most famous is CIBIL, but there are others like Experian, Equifax, and CRIF Highmark, which generate scores equally valuable. We, at HDFC Bank, take data from all three bureaus to assess your credibility. <Find out more>

Credit score for home loan

Before getting the ideal credit score for a home loan, first let’s understand what a credit score means. Your credit score reflects your ability to repay loans.

Your capacity to repay loans is a key consideration when assessing your home loan application. Your score can be a number ranging from 300 to 900, reflecting your creditworthiness. The higher the score, the better your creditworthiness.

Given below is a snapshot of what each credit bureau does:

CIBIL: The most widely referred credit bureau in India, the bureau provides access to various financial institutions and lenders. It is one of the most pivotal score factors for getting loans approved.

Experian: One of the best-known bureaus across the world, Experian is reliable and gives scores that base themselves on various types of financial behavior and history of credit.

Equifax: This is another international credit bureau that operates in India, and Equifax scores are widely used by banks and financial institutions to evaluate loan applications.

CRIF Highmark: A relatively recent entrant into the Indian credit market, CRIF Highmark also offers valuable information to lenders, in order to enable informed decisions.

How much score is required for home loan

So, how much score is required for a home loan?

Generally, an ideal CIBIL score for home loan is around 700. However, this is not a strict threshold; this may vary. For instance, your loan might get approved with scores below 700, if other aspects of your financial profile are strong. Nonetheless, a score of 750 or above is considered ideal for securing better loan terms.

At HDFC Bank, we also consider other factors like your income, employment history, and the property value. Our team can work with you to find a suitable plan for your dream home.

Factors affecting credit score home loan eligibility

Several factors influence your credit score home loan eligibility. These include your payment history, credit utilisation ratio, how long you've had credit, and types of credit. A consistent repayment history, low credit utilisation, and a mix of credit types (having different kinds of loans and credit accounts — like a credit card, a car loan, and a home loan) can boost your score, enhancing your eligibility for a home loan.

How to check your credit scores

To check your credit scores online for free, visit the respective credit bureaus. You will need to provide some personal and financial information, such as your PAN, date of birth, and income details, to access your score.

How to improve your credit score for home loan

If your score is below the desired credit score for a housing loan, don't worry; there are ways to improve it. Start by paying off outstanding debts and ensuring timely payments on all credit accounts. Reducing your credit card balances and avoiding new credit inquiries can also positively impact your score. Regularly checking your credit report for inaccuracies and rectifying any errors can further help in improving your score.

In conclusion, understanding the role of the credit score for a home loan is crucial for prospective homebuyers. Whether you're planning to buy your first home or upgrade to a new one, maintaining a good score can impact your financial journey. Always aim to maintain or improve your score to ensure a smooth and beneficial home loan experience.